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QOCs for Scotland update – expectations and reality?

By David Stoker, Senior Underwriter

(Estimated reading time: 2 minutes 55 seconds)

In mid-November two of our underwriters went to Scotland and visited some high-profile firms to get a feel as to how cost shifting is working since its introduction in June. The general feeling seems to be that it may not be the panacea it was thought to be – in terms of providing Pursuers with access to justice safe in the knowledge that they will not have to pay Defender’s expenses should the case fail.

The Civil Litigation Act provides the framework for the QOCS regime in Scotland but there is much to be fleshed out in terms of secondary legislation and case law. The concerns we heard were mainly how the three exceptions to cost protection and four listed scenarios in the Act of Sederunt will work in practice, namely;

Section 8 (4) of the 2018 Act provides for three exceptions to the cost protection:-

  • If the claimant or their legal representative makes a fraudulent misrepresentation or otherwise acts fraudulently in connection with the claim;
  • If the pursuer or their legal representative behaves manifestly unreasonably in connection with the claim; or
  • If the pursuer or their legal representative commits an abuse of process.

The rules provide four further scenarios where cost protection may be disapplied:-

  • Where the pursuer fails to beat a minute of tender (broadly equivalent to a part 36 offer);
  • Where the pursuer has “unreasonably delayed” in accepting a minute of tender;
  • Where the pursuer seeks to abandon the action by way of decree of dismissal or decree of absolvitor in favour of the defender;
  • Where the defender has applied for and obtained a summary decree against the pursuer and is granted decree of absolvitor or dismissal.

It is still too early to pinpoint what constitutes unreasonable behaviour and also whether abandonment will deprive a Pursuer of cost protection.

Abandonment cropped up in a number of conversations – as most cases in Scotland are not finalised either way until after the action is raised. Around 80% settle one way or the other after the action is raised and the Defender will have racked up a fair amount of costs by that point.

In a clinical negligence case we know the merits can change, especially at the joint expert stage and abandonment may be the best course of action. To continue with a case now believed to be weak (rather than abandon) could be deemed manifestly unreasonable. On the other hand is it not just a battle of the experts.

One practitioner commented that a Defender is more likely to walk away when a case is abandoned than seek their costs of the action. A Defender is more likely to be content with seeing an end to the action. That said we don’t know yet how this will materialise in practice It will probably not be until Spring 2022 when the first QOCS cases seethe inside of a courtroom, settle or discontinue.

In conclusion the general feeling is that ATE insurance is needed in personal injury and clinical negligence matters as much now as before cost shifting was introduced.

We are already working with a number of firms providing ATE insurance for personal injury and clinical negligence cases both pre and post QOCS. We would be delighted to discuss our products and services with you.

Do get in touch.  If you would like more information on our ATE insurance and outlay funding products, please email david.stoker@temple-legal.co.uk or call me on 01483 514808. I look forward to hearing from you.

You may also want to read

‘The Temple Guide to Personal Injury and Clinical Negligence ATE insurance and Outlay Funding for Scotland’

‘QOCs for Scotland – what’s been happening?’

David Stoker, LL.B (Hons)

Senior Underwriter
Read articles by David Stoker, LL.B (Hons)

David Stoker, LL.B (Hons)

David joined Temple in August 2015 having previously been an underwriter for another ATE insurance provider for nearly 9 years dealing with all aspects of personal injury work.

David’s experience allows him to undertake a key role in Temple’s ATE insurance personal injury and clinical negligence teams. He also participates in the assessments of delegated schemes that Temple provide with the objective of helping our customers make the most of the products and services Temple has to offer.

David has a LLB honours degree in law and also completed the Legal Practice Course at Guildford College of Law obtaining a commendation. He has worked as a personal injury case handler for 2 firms of solicitors post-graduation before moving into LEI.

 

Read articles by David Stoker, LL.B (Hons)